Mayor scraps fuel deal with Venezuela

Boris Johnson has scrapped a controversial deal between London and Venezuela which helped to fund half-price bus and tram fares for Londoners on low incomes.

The mayor announced yesterday that the agreement he inherited from Ken Livingstone, which traded London's expertise in transport and urban planning for subsidised diesel, would not be renewed when it expired in August.

In the run-up to his election this month the Conservative had denounced the accord as a "completely Caracas" alliance between his Labour rival and Venezuela's president, Hugo Chavez.

The mayor said there were better ways to help the British capital and Venezuela. "I think many Londoners felt uncomfortable about the bus operation of one of the world's financial powerhouses being funded by the people of a country where many people live in extreme poverty." The deal, estimated to be worth £15m, covered a fifth of the fuel bill for buses and trams. The savings were converted into discount fares for around 250,000 people on income support. There are no plans to continue the discounts after August.

Livingstone called the move an attack on the poor. "Regardless of Boris Johnson's objections to the oil agreement with Venezuela he has announced no alternative way to provide cheaper travel. It shows that he is more interested in pursuing his rightwing ideological agenda than improving the living standards of the most deprived people in the capital."

Marking an end to the tentative detente between the two men since Johnson's victory, the former mayor blasted Johnson's "Tory regime" for the "cowardly" manner of the announcement. "He has made the announcement on bank holiday Sunday without any consultation with the organisations representing the thousands of carers, single parents and others affected and at a time when he can assume there will be less media coverage."

The decision had been expected. Tories had used the "oil for brooms" deal to paint Livingstone as a loony lefty in thrall to a South American dictator. The former mayor has made no secret of his admiration for Chavez, a self-styled socialist revolutionary who has been democratically elected.

Venezuela's government made no immediate response to London's announcement but it is understood Caracas had hoped to continue the deal.

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